Should gig workers be employees? A reflection on the Uber CEO's letter to the NYT.
Welcome to Ideothetic Flow! This is my passion project where I share my reflections on being a better person and building a kinder world.
If you are new here and this resonates, please subscribe so we can stay connected. I write a new post every 2 weeks. You can also see more by visiting my site at www.ideotheticflow.com, or clicking the picture above.
Hi,
This letter by Dara Khosrowshahi - CEO of Uber, to the New York Times, got my interest this week:
NYT Opinion - I Am the C.E.O of Uber. Gig Workers Deserve Better.
It was a response to the AB5 law in California, requiring Uber and Lyft to reclassify drivers as employees (thus obtaining employment law rights).
The contractor/employee classification
The issue of classifying a worker as an independent contractor or employee is close to my heart. A part of my career was spent learning about the various legal rules, educating others, and handling issues relating to this distinction. I have two main thoughts:
Regulation can have unintended effects. Employment laws can look good on paper but backfire in practice. Various forms of pro-employee laws exist - a constitutional right to work (Philippines), the impossibility of unilateral termination (Indonesia), strict severance payment rules (Thailand), unfair dismissal rules (Malaysia). The stronger the rules, the more likely people will find ways to get around them. Those who want to try and comply end up unable to compete. Only the most brazen or exploitative businesses are left standing.
No one should be allowed to enjoy the benefits of both. Companies should not disguise employees as contractors and escape their regulatory obligations. Contractors should not ask for employment benefits when they had been treated as freelancers, to come and go as they please.
Uber’s contribution is flexibility
Dara’s response points out how Uber grants flexibility that traditional employment lacks.
“Unlike traditional jobs, drivers have total freedom to choose when and how they drive, so they can fit their work around their life, not the other way around. Anyone who’s been fired after having to miss a shift, or who’s been forced to choose between school and work, will tell you that this type of freedom has real value and simply does not exist with most traditional jobs.”
Dara also points out that workers are caught between two extremes:
“Our current employment system is outdated and unfair. It forces every worker to choose between being an employee with more benefits but less flexibility, or an independent contractor with more flexibility but almost no safety net.”
I agree with these observations.
Entrenching the traditional employment model is not effective in protecting workers
The traditional employment model is all or nothing. It requires absolute loyalty to the employer who has control over a person’s life. Control is in fact the most common test of whether a person is an employee or a contractor. It was a model built for a time of lower skilled labour, and most likely for the best exploitation of that labour.
For an interesting background on how we got to the 8-hour workday, our current expectation of employment, and some of my inspirations for this reflection, check out this interview with labor historian Emily Twarog on the Rework Podcast.
Employment laws are premised on this model, where each person’s identity is closely linked to a single employer. Safety nets are also tied to employment. Merging a person’s safety net with their employer is inadequate. Bad employers do not truly care. They see the rules as a cost. They would only comply with token rules that have minimal cost, and try to find ways to avoid more onerous ones. Those employers who do care about their employees don’t need regulation. Regulation might even stifle their creativity and hinder them from offering better work structures.
Employment laws fail to address deeper problems. We recently saw an episode exposing toxic workplace cultures in Singapore. Beyond the minimal legal requirements, employers work to preserve their own flexibility as much as possible:
“Office hours are 9 to 6, or such times you are required to work”
“Annual leave is subject to approval by your managers”
“Bonuses and promotions are at the discretion of the company”
These are all contractual terms I have drafted before in one form or another.
I wonder whether trying to forcibly reclassify gig workers, or strengthening employment rules is really a good solution, or merely the one which looks best politically.
The modern, knowledge based, economy, requires new ways of working.
I have my doubts whether Uber’s brand of flexibility works. There are many criticisms of its practices. Reliance on an app platform, whose loyalty is to investors rather than drivers, comes with its own dangers.
What I do agree is that we need to be creating new structures of work. In an ideal world, we would have a range of options, not choosing only between 2 flawed extremes. I welcome companies like Uber sparking the conversation and challenging the meaning of work. I hope it leads to more experiments to create different models of work.
Presently, those who do not fit the model will find it difficult to to fully live up to their potential. For example, a parent with some free time while children are at school. The caregiver of an ageing parent who needs very stable work hours. Someone trying to upskill by taking a course but also needs ongoing income for the family. The talented baker who wants to build a small side business while working as a marketing executive. These are all instances of lost productivity to society.
I don’t think prescriptive strengthening of labour rights such as dictating work hours or notice periods gets businesses to innovate. Instead, we should shift safety nets away from employment, towards the working class directly as members of the community. This gives workers better bargaining power, improving their BATNA*, allowing them to walk away from a bad workplace. I think this will produce a better operation of the labour market. Workplaces are then incentivised to adjust and improve their work models.
*For more on BATNA, check out: “Take charge of your career by supercharging your bargaining power” by my friend ZiLiang, @ the ArtScienceMillienial.
How can we promote new ways of working?
I place a huge premium on flexibility. For me, work is merely a means to an end. I want to prioritise other things, and to minimise the risk of having to cancel on something personal because of work. This essay might appear as if I am ranting about my difficulties at work. In truth, and to clarify, I have had the good luck not to have these problems. This is not because of the system, or some special skill I have, rather I owe it all to the colleagues and managers I have had.
I recall asking my boss to ask for a long paternity break (I took 3 months off). She said yes without any hesitation. I appreciate how my colleagues, past and present, make an active effort to avoid asking for work outside office hours, and don’t get upset when I need to go off a little earlier or come in a little later. I have had managers who love their work, and rather than expect me to share their passion and put in the same intensity, recognise that I have a similar love for other things, and it would cause so much pain to take it away. It is because of these great people that I have managed to enjoy flexibility.
It is because I have enjoyed it, that I know how much it can do for quality of life. Yet I see many people around me who do not have this luxury, and I feel aggrieved on their behalf.
We all need to do our part to support the creation of new work models. We can maintain an open mind to different ways to work, and cast off assumptions that what we have been doing is normal or right. We can be better colleagues and make our workplaces easier to survive. We can talk to gig workers, find out why they do what they do, the troubles they face, and think about whether the prices we pay them make economic sense.
James
Thanks for reading! I would love to hear any thoughts you had about this post and to discuss it further. What would be your preferred model of work and why? Do you have stories of difficulties you faced balancing work and life, or examples of colleagues or employers who made it possible? Do share them!
You can reply this email, leave a comment, or drop me a message.